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BP p.l.c. (GB:BP)
LSE:BP
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BP p.l.c.
(LSE:BP)
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Rating:57Neutral
Price Target:
436.00p
▲(0.00% Upside)
BP's overall stock score is primarily influenced by its financial performance challenges, including declining revenue and profitability issues. The earnings call provided a positive outlook with strong operational achievements and strategic initiatives, which helped offset some financial concerns. Technical analysis and valuation suggest caution, with mixed signals and potential overvaluation.
Positive Factors
Exploration Success
BP's recent exploration successes in Brazil and Namibia enhance its resource base, supporting long-term growth and competitive positioning in the energy sector.
Operational Efficiency
High operational reliability indicates strong management and process efficiency, which can lead to sustained cost advantages and improved profitability over time.
Cost Reduction Initiatives
Ongoing cost reduction efforts improve BP's financial resilience, enhancing its ability to invest in growth and withstand market volatility.
Negative Factors
Declining Revenue Growth
Significant decline in revenue growth suggests market challenges and potential difficulties in maintaining competitive edge, impacting long-term financial health.
High Debt Levels
Elevated debt levels can limit financial flexibility, increasing risk during downturns and potentially affecting BP's ability to invest in future opportunities.
Profitability Issues
Negative net profit margins highlight ongoing profitability challenges, which could hinder BP's ability to generate sustainable returns and invest in growth.
BP p.l.c. (BP) vs. iShares MSCI United Kingdom ETF (EWC)
Market Cap
£66.87B
Dividend Yield5.64%
Average Volume (3M)26.71M
Price to Earnings (P/E)167.3
Beta (1Y)1.03
Revenue Growth-9.96%
EPS Growth-92.38%
CountryUK
Employees100,500
SectorEnergy
Sector Strength52
IndustryOil & Gas Integrated
Share Statistics
EPS (TTM)0.11
Shares Outstanding15,708,611,000
10 Day Avg. Volume25,231,935
30 Day Avg. Volume26,714,907
Financial Highlights & Ratios
PEG Ratio-2.16
Price to Book (P/B)1.36
Price to Sales (P/S)0.43
P/FCF Ratio6.71
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
£454.29Price Target Upside4.19% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering15
BP p.l.c. Business Overview & Revenue Model
Company DescriptionBP p.l.c. engages in the energy business worldwide. It operates through Gas & Low Carbon Energy, Oil Production & Operations, Customers & Products, and Rosneft segments. It produces and trades in natural gas; offers biofuels; operates onshore and offshore wind power, and solar power generating facilities; and provides de-carbonization solutions and services, such as hydrogen and carbon capture and storage. The company is also involved in the convenience and mobility business, which manages the sale of fuels to retail customers, convenience products, aviation fuels, and Castrol lubricants; and refining and trading of oil products, as well as operation of electric vehicle charging facilities. In addition, it produces and refines oil and gas; and invests in upstream, downstream, and alternative energy companies, as well as in advanced mobility, bio and low carbon products, carbon management, digital transformation, and power and storage areas. The company was founded in 1908 and is headquartered in London, the United Kingdom.
How the Company Makes MoneyBP generates revenue primarily through the exploration and production of oil and natural gas, which constitutes a significant portion of its earnings. The company sells crude oil and natural gas to wholesalers and large consumers, while its refining operations convert crude oil into valuable petroleum products, generating additional income. Retail operations, including BP-branded gas stations, contribute to revenue through the sale of fuel and convenience store products. Additionally, BP has been expanding its investments in renewable energy, which, while currently a smaller revenue stream, is expected to grow as the demand for sustainable energy solutions increases. Strategic partnerships and joint ventures with other energy companies further enhance BP's capabilities and market reach, enabling it to optimize resource extraction and share operational costs.
BP p.l.c. Earnings Call Summary
Earnings Call Date:Aug 05, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 04, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong operational performance and significant financial achievements, including record performance in several segments. However, challenges in specific areas like TravelCenters of America and impairments were noted. The overall sentiment is positive due to the outweighing strengths in exploration, cost reductions, and financial returns.Q2-2025 Updates
Positive Updates
Strong Operational Performance
BP reported reliability across upstream and downstream operations greater than 96%, with five new oil and gas projects brought online, four more sanctioned, and 10 exploration discoveries, marking the best year for discoveries in recent memory.
Significant Financial Achievements
Underlying earnings in the customers' business increased by approximately 50% year-over-year. BP announced a dividend per ordinary share of $0.0832, an increase of 4%, and a further $750 million share buyback for the second quarter.
Record Performance in Convenience and Mobility
The second quarter in M&C (Marketing and Customers) was the best on record since 2012, with a strong performance in capturing customers and margins, driving costs out, and achieving record profitability across multiple segments.
Exploration Success in Brazil and Namibia
BP made a significant discovery in the Bumerangue Block in Brazil and another in Namibia, part of 10 commercial discoveries, making it the best year in a decade.
Cost Reduction Progress
BP delivered around $1.7 billion of structural cost reductions since early 2024, with further savings expected through ongoing initiatives in technology, supply chain, and data management.
Negative Updates
Challenges in TravelCenters of America (TA)
BP is experiencing tight diesel margins in the TA segment, impacting profitability. The company is taking actions to address these challenges.
Impairments and Adjustments
BP reported several impairments, including those in the customer and products space, and in gas and low carbon, due to changes in strategic focus and project evaluations.
Working Capital Challenges
BP experienced a working capital build of $4.7 billion in the first half of the year, with expectations for reversal in the second half not fully met.
Company Guidance
In the second quarter of 2025, BP's operational and strategic performance was robust, with a focus on both upstream and downstream sectors achieving reliability greater than 96%. The company brought five new oil and gas projects online, sanctioned four more, and made ten exploration discoveries, including a significant one in Brazil's Bumerangue Block. Underlying earnings in the customer business increased by approximately 50% year-over-year, and trading remained strong despite challenging conditions. BP reported $3 billion in expected proceeds from divestments for the year and achieved $1.7 billion in structural cost reductions since early 2024. Additionally, the dividend per ordinary share was raised by 4% to $0.0832, and a $750 million share buyback was announced for the quarter, as part of a 12-quarter plan to maximize long-term shareholder value.BP p.l.c. Financial Statement Overview
Summary
BP's financial statements reflect challenges in revenue growth and profitability, with a negative net profit margin and high debt-to-equity ratio. Cash flow analysis indicates potential liquidity issues, though operational efficiency remains a positive aspect.Income Statement
BP's income statement shows a mixed performance. The TTM data reveals a significant decline in revenue growth rate at -44.1%, indicating a challenging market environment. Gross profit margin stands at 15.43%, which is relatively stable, but the net profit margin is negative at -0.64%, reflecting profitability issues. EBIT and EBITDA margins are moderate at 5.45% and 14.42%, respectively, suggesting operational efficiency but also highlighting the impact of external pressures on profitability.55
Neutral
Balance Sheet
The balance sheet indicates a high debt-to-equity ratio of 1.22, which suggests a leveraged position that could pose risks if market conditions worsen. Return on equity is negative at -2.02%, reflecting challenges in generating returns for shareholders. However, the equity ratio is a moderate 20.81%, indicating a balanced asset structure. Overall, the balance sheet reflects a stable yet cautious financial position.60
Neutral
Cash Flow
Cash flow analysis shows a decline in free cash flow growth at -15.72%, indicating potential liquidity challenges. The operating cash flow to net income ratio is 0.39, suggesting adequate cash generation relative to net income. However, the free cash flow to net income ratio of 0.41 highlights the need for improved cash management. Overall, the cash flow statement reflects a need for strategic adjustments to enhance liquidity.50
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 185.45B | 185.23B | 213.67B | 240.86B | 154.71B | 112.38B |
| Gross Profit | 29.99B | 28.11B | 47.39B | 54.05B | 21.65B | -534.61M |
| EBITDA | 28.62B | 25.11B | 42.89B | 29.37B | 27.82B | -7.46B |
| Net Income | 609.55M | 382.83M | 15.50B | -2.48B | 7.42B | -21.54B |
Balance Sheet | ||||||
| Total Assets | 284.74B | 282.23B | 280.29B | 288.12B | 287.27B | 267.65B |
| Cash, Cash Equivalents and Short-Term Investments | 35.31B | 34.52B | 28.59B | 29.77B | 30.96B | 29.53B |
| Total Debt | 74.98B | 71.55B | 63.08B | 55.49B | 69.79B | 81.93B |
| Total Liabilities | 204.96B | 203.91B | 194.80B | 205.13B | 196.83B | 182.09B |
| Stockholders Equity | 59.24B | 59.25B | 70.28B | 67.55B | 75.46B | 71.25B |
Cash Flow | ||||||
| Free Cash Flow | 8.59B | 12.00B | 17.75B | 28.86B | 12.72B | -144.00M |
| Operating Cash Flow | 23.29B | 27.30B | 32.04B | 40.93B | 23.61B | 12.16B |
| Investing Cash Flow | -12.18B | -13.25B | -14.87B | -13.71B | -5.69B | -7.86B |
| Financing Cash Flow | -10.93B | -7.30B | -13.36B | -28.02B | -18.08B | 3.96B |
BP p.l.c. Technical Analysis
Positive
436.00
Price Trends
425.27
Positive
406.77
Positive
398.10
Positive
Market Momentum
1.02
Negative
60.30
Neutral
94.01
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:BP, the sentiment is Positive. The current price of 436 is above the 20-day moving average (MA) of 424.07, above the 50-day MA of 425.27, and above the 200-day MA of 398.10, indicating a bullish trend. The MACD of 1.02 indicates Negative momentum. The RSI at 60.30 is Neutral, neither overbought nor oversold. The STOCH value of 94.01 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:BP.
BP p.l.c. Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
| ― | £1.76B | 10.78 | 17.24% | 5.68% | -2.66% | 0.11% | |
| ― | £164.24B | 16.50 | 7.54% | 3.82% | -8.55% | -22.62% | |
| ― | £1.72B | 15.87 | 7.92% | 3.16% | 118.04% | 65.66% | |
| ― | £3.48B | -28.03 | -7.04% | 12.73% | 31.96% | -159.27% | |
| ― | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% | |
| ― | £3.67B | -9.71 | -11.32% | 7.92% | 123.03% | -330.89% | |
| ― | £66.87B | 167.29 | 0.82% | 5.64% | -9.96% | -92.38% |
* Energy Sector Average
GB:BP
BP p.l.c.
433.70
76.62
21.46%
GB:HBR
Harbour Energy
220.20
-16.76
-7.07%
GB:SHEL
Shell (UK)
2,833.00
452.14
18.99%
GB:SEPL
SEPLAT Petroleum Development
302.50
89.66
42.13%
GB:ENOG
Energean
943.00
52.94
5.95%
GB:ITH
Ithaca Energy PLC
208.00
122.69
143.82%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.